Iran's rial currency falls to near-record lows on European 'snapback'
sanctions threat
[August 28, 2025] By
JON GAMBRELL
DUBAI, United Arab Emirates (AP) — Iran's rial currency fell to
near-record lows Thursday as concerns grew in Tehran that European
nations will start a process to reimpose United Nations sanctions on the
Islamic Republic over its nuclear program, further squeezing the
country's ailing economy.
The move, termed the “snapback” mechanism by the diplomats who
negotiated it into Iran’s 2015 nuclear deal with world powers, was
designed to be veto-proof before the world body and would be likely to
go into effect after a 30-day window. If implemented, the measure would
again freeze Iranian assets abroad, halt arms deals with Tehran and
penalizes any development of its ballistic missile program, among other
measures.
In Tehran on Thursday, the rial traded at over 1 million to $1. At the
time of the 2015 accord, it traded at 32,000 to $1, showing the
currency's precipitous collapse in the time since. The rial hit its
lowest point ever in April at 1,043,000 rials to $1.
France, Germany and the United Kingdom warned Aug. 8 that Iran could
trigger snapback when it halted inspections by the International Atomic
Energy Agency after Israeli strikes at the start of the two countries’
12-day war in June. Israeli attacks then killed Tehran’s top military
leaders and saw Supreme Leader Ayatollah Ali Khamenei go into hiding.
Seeking to use the “snapback” mechanism likely will raise tensions
further between Iran and the West in a Mideast still burning over the
Israel-Hamas war in the Gaza Strip.
“The U.S. and its European partners see invoking the ‘snapback’ as a
means of keeping Iran strategically weak and unable to reconstitute the
nuclear program damaged by the U.S. and Israeli strikes,” the New
York-based Soufan Center think tank said Thursday.
“Iranian leaders perceive a sanctions snapback as a Western effort to
weaken Iran’s economy indefinitely and perhaps stimulate sufficient
popular unrest to unseat Iran’s regime.”
Iran appears resigned
Iran initially downplayed the threat of renewed sanctions and engaged in
little visible diplomacy for weeks after Europe’s warning, but has
engaged in a brief diplomatic push in recent days, highlighting the
chaos gripping its theocracy.
Foreign Minister Abbas Araghchi, speaking last week, signaled Iran’s
fatalistic view of its diplomacy with the West, particularly as the
Israelis started the war just as a sixth round of negotiations with the
United States were due to take place.
“Weren’t we in the talks when the war happened? So, negotiation alone
cannot prevent war,” Araghchi told the state-run IRNA news agency.
“Sometimes war is inevitable and diplomacy alone is not able to prevent
it.”
At issue is Iran’s nuclear enrichment
Before the war in June, Iran was enriching uranium up to 60% purity, a
short, technical step away from weapons-grade levels of 90%. It also
built a stockpile containing enough highly enriched uranium to build
multiple atomic bombs, should it choose to do so.
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 Iran long has insisted its program
is peaceful, though Western nations and the IAEA assess Tehran had
an active nuclear weapons program up until 2003.
It remains unclear just how much the Israel and
U.S. strikes on nuclear sites during the war disrupted Iran’s
program.
Under the 2015 deal, Iran agreed to allow the IAEA even greater
access to its nuclear program than those the agency has in other
member nations. That included permanently installing cameras and
sensors at nuclear sites. Other devices, known as online enrichment
monitors, measured the uranium enrichment level at Iran’s Natanz
nuclear facility.
The IAEA also regularly sent inspectors into
Iranian sites to conduct surveys, sometimes collecting environmental
samples with cotton clothes and swabs that would be tested at IAEA
labs back in Austria. Others monitor Iranian sites via satellite
images.
But IAEA inspectors, who faced increasing restrictions on their
activities since the U.S. unilaterally withdrew from Iran’s nuclear
deal in 2018, have yet to access those sites. Meanwhile, Iran has
said it moved uranium and other equipment out prior to the strikes —
possibly to new, undeclared sites that raise the risk that monitors
could lose track of the program’s status.
On Wednesday, IAEA inspectors were on hand to watch a fuel
replacement at Iran's Bushehr nuclear reactor, which is run with
Russian technical assistance.
European nations set deadline
In their Aug. 8 letter, the three European nations warned Iran they
would proceed with “snapback” by the end of August if Tehran didn’t
reach a “satisfactory solution” to the nuclear issues. That's left
little time for Iran to likely reach any agreement with the
Europeans, who have grown increasingly skeptical of Iran over years
of inconclusive negotiations over its nuclear program.
The deal’s snapback mechanism would expire Oct. 18, which put the
three European nations in a situation where they likely feel now is
the time to act. Under snapback, any party to the deal can find Iran
in noncompliance, triggering renewed sanctions.
After it expires, any sanctions effort would face a veto from U.N.
Security Council members China and Russia, nations that have
provided some support to Iran in the past but stayed out of the June
war. China as well has remained a major buyer of Iranian crude oil,
something that could be affected in “snapback” happens.
Russia in recent days has floated a proposal to extend the life of
the U.N. resolution granting the “snapback” power. Russia also is
due to take the presidency of the U.N. Security Council in October,
likely putting additional pressure on the Europeans to act.
___
Associated Press writer Amir Vahdat in Tehran, Iran, contributed to
this report.
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